Can You Actually Afford a $400,000 Home?
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- Опубликовано: 27 июл 2024
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I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!
That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!
Mind if I ask you to recommend this particular coach you using their service?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
I’m in Colorado and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $380K. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $75OK+ now. Wild times.
I always wonder how can the typical family with average income afford a higher rate+ more expensive home? in my area multi generational home is becoming the norm . Don’t forget to add the inflation which just this week was 9.1 on the CPI , producers index 11.3, it’s going to be a rough ride for sure
This is why being informed pays off. I see any financial market condition as a plethora to make wealth. I had my $80k diversified and it has grown by 3x in the past 7 months with compounding, venturing doesn’t necessarily boil down to funds but you also have to be informed, be patient and back it up with good guidance
@@MarkFreeman-xi3rk How did you get that, i'm pretty sure its not through the financial market because its punching everyone in the balls every single day.
Actually, I've shuffled through a few advisors in the past, and Margaret Johnson Arndt remains the most resourceful thus far. Her strategy proves profitable, and sustainable both in a bull & bear market. Most likely, her deets can be found on the net, so you can confirm yourself.
Insightful... I curiously looked up her name on the internet and I found her site and i must say she seems proficient, thanks for sharing.
I’m so overwhelmed. I don’t think I’ll ever buy a home
whats the top three reasons that you want to buy a home?
I feel the same way.
Probably not
You will. It might just take a few years.
@@RampFisha no more rent , place for my family , have equity , some day when house is paid for
Living without a partner or middle-class parents with a home you can stay at makes this game way too hard.
My suggestion would be to rent out a room in a persons house
I would suggest roommates and while your single learning a valuable skill and grind! Don’t get into a ton of debt and be cautious about student loans etc. absorb all the information you can about personal finance and your skill!
My husband and I both started with nothing and met after we both graduated college. I think if we did not have an extreme motivation to get out of poverty we would have been screwed.
When you don’t have family help it is WAY harder but before you have kids get your s*** together and learn learn learn
@@adisc7475 That’s what I do , $750 🙏🏻
I could live at home for free thankfully ! But too many distractions for me in that area
Wife and I make about 140K a year combined. Luckily we bought our house new in 2015 which cost 259K at 3.5%. The same house now goes for over 500k in the area.. Our mortgage payment is under 1500, and that’s high to me. Hell, we took out 60k in home equity credit for home improvements and our payment is still under 2k. I can’t even imagine how people are affording 3k a month mortgage. I feel bad for folks trying to buy now. Especially for younger people who just want a place to call home.
How old are you guys ?
your budget must be a serious mess if you can't figure out how to easily pay 1500 a month out of 140k.
Why would you need 60K for home improvements when you bought a brand new House 🏠 🤔 what?😢
Something is missing 🙁
130k between my wife and I. 6.49% and total mortgage payment monthly is $2821. We make it work and we're doing fine.
@@2Tall_PowerliftingWhere are you located? I make $130k alone and still feel like I can’t afford these homes😭 Mostly cause of my take home pay.. I wish I saw all that $130k
Do you guys like me using a price point like in this video or a salary like in the previous video?
Salary is better, but why not both? 😁
Salary point, to illustrate how unaffordable ownership of housing is now for an average American
@@costak7679your a victim
Balls
@@theeverfartingelephant8189 Not a victim, a casualty
When I was looking for a house. I paid off all my debt. And calculated how much i would need more or less for an emergency fund, for at least 3 months. I found and bought my repo house when I was single. 3 yrs later i was diagnosed with cancer. The following year, after my diagnosis. New management came in, and i lost my job. I couldn't look for a job, due to going back to the hospital and Dr's to check for any remaining cancer cells. That emergency money came in handy. I advise to have an emergency fund. You just don't know what life is going to throw at you.
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2024. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
Investing in real estate and stocks might be a wise choice, particularly if you have a sound trading plan that can get you through profitable days.
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who were forced to witness the 2008 financial crisis could expect to generate a large wage. I had the pleasure of dealing with one, and it turned out to be really helpful as they assisted me in restructuring my complete portfolio.
@@mikegarvey17I'm intrigued by the idea of investing with an analyst, it seems like a wise choice in today's market. Could you provide me with some guidance on how to get in touch ?
CAMILLE ALICIA GARCIA maintains an online presence. Just make a simple search for her name online.
Thanks, I just googled Camille and I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
I’m making around $160k and was initially excited, then I realized there are no houses under 500k in my city lol
You can have roommates and save until you can afford a home or get married and have double income.
How much u got saved so far?
30-year mortgage payments
@@euenfheiejrj Not worth the trouble
It's called a mortgage and yes you can find decent rates which inevitably will result In payments between 2,000 and 2,500 on a 400,000$ loan. If you don't like the interest rate, don't buy because it costs you thousands of extra dollars year after year.
People don't comment enough about your humor "home ownership is as unobtainable as it is for me to receive my dad's love and affection and respect" 😂
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Ok 9%. How much was the house? 50k
Exactly, home prices back in 1991 lmao come on. The house was no more than 50-80k
@not4you201 exactly. I don't like when the older generation compares their interests rates to the interests rates of today. The mortgage on a 50k house at 9% can't compare to a to a 400k house.
10% on a home that’s 200k isn’t the same as 10% on 400k
In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
@@belobelonce35 You are right! I’ve diversified my 450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $830k in net profit across high dividend yield stocks, ETF and bonds.
@@edelineguillet2121 Do you mind sharing info on the adviser who assisted you?
Unemployment is really low and people that overbought with low interest rates are still paying less than we'd have to today. I'd love for there to be a crash, but there's no obvious indicator that there will be one.
For the most part, people can afford their homes and tech workers that get laid off get their severance packages and find a job pretty quickly. People that locked in a sub-3% interest rate have no incentive to sell.
If there is a crash, it'd have to be from some other issue (ie: credit card debt and vehicle loans).
A correction maybe but I doubt a crash at least where I am. Nearly every home bought in my neighborhood was bought with cash. My neighbor financed but only 70%. Also, people with this kind of money won’t want to ruin their credit. The average home in my neighborhood is 700k.
100% agree about making your own mortgage calculator. I even made them for friends and family.
My husband and I have been going through the process of purchasing for the last 2 years. It’s been rough. We’ve been through multiple types of lending. USDA guaranteed and fha. We got approved for 265,000 just under my husbands credit and income. May not seem like a lot but with interest rate for us at a 6.5.. that’s an additional 400 dollars added. We find that to be comfortable and not borrow above what we can afford, it’ll be 210-220,000 for us. Unfortunately in our area, we can’t find anything in our range, even for our approval of 265,000. I graduate from dental school this week and I hope I’ll be able to have a descent amount of monies to add to our household. My husband isn’t in a rush to buy, especially with our rent increased it’s cheaper.
Wait until q4 2024. It's moving your direction
@@RDA8191 I hope so. ❤️
@@RDA8191were you also waiting during the pandemic ? 😭
I’d wait until you have the income to contribute (for a host of reasons). My wife and I wanted to buy about 10 years ago, details unimportant, but it would’ve been a rental property after 1 year and very risky if we couldn’t find tenants. We wanted to again about 6 years ago, but couldn’t afford anything but a townhome/condo in the area we liked.
We finally got everything settled, bought a nice house in Chicago that’s well under what we could afford, but leaves us tons of financial flexibility.
If you buy at your cap, you’re stuck. Sounds like you’ll have substantially more money soon, interest rates suck, and you could trap yourself in a house you don’t like.
You graduate from dental school. Average in US is 123k yearly for dentist. You'll be happy in your new cozy home soon, no longer than 2-4 years.
Now do one for groceries, you know.. goals for us little people.
My wife and I made over $220k when lived in California and we still too poor to afford a home. Out there (LA area) homes are $800k+ avg. I have no idea how people were buying homes for those prices. They would need to be making ~$370k to meet the 50-30-20 rule. Wtf.
…Yes, we left the state.
It's crazy thinking about those numbers! I can't believe people are out here paying $100k+ over asking price (according to the VA/DC reddits.)
My mild depression just sunk to major
Production value really increased. Nice job!
some people really need to move. i make over 140k and just bought in the rust belt, and still budget as best i can. people wanting to live in california, new york, parts of florida, arizona, oregon etc. but not making over 110-120k or so... i'm sorry but please either significantly up your income, or move somewhere cheaper. most people don't have a magic pot of money that comes later in life (most of the time inheritance isn't a lifelong "golden ticket") so you really risk needing to work until you die. it's a sad reality
and before i hear the "but my family!!" comments...shame on them for guilting you to live a life of being broke and not able to afford anything so that you can live in the same place where they bought a house for pennies on the dollar. i LOVE california but the prices are 1000% illogical and indefensible
Same! Buying in PA, moved out of D.C.
Best way I describe it “I was surviving in D.C, now I’m living.”
California is fine, just don't live in the stupidly expensive areas, I moved to a city where the average home is still under 400k and loving it here
@@jtowensbyiii6018 100% an option. the world isn't fair but i cannot stand people that want to live in LA making $50k a year multiple years into their career
Man this example was perfect. This was right at my income level and need to buy before December. I wish I could wait a bit longer but circumstances have come up. Hopefully things level off a bit more after the next rate hike.
Love your videos! Literally answering questions I just started asking myself lol
We're currently leasing a SFH in the Atlanta Metro. My neighbor just listed his home at $415K.
The monthly mortgage will be around $3K, and the house we're leasing is $2100, and it is bigger and renovated.
The neighbor's home was just purchased for $210K in 2017. A lot of these homes have to come down in pricing in most Metros for them to make sense.
My wife and I are in our early to mid 30s. We bought a home for 560k in 2022 with 10% down. We have one kid, who is in daycare. Together we bring in about 225k-250k. We eat out too much, mostly at Chick-fil-A and Starbucks with is death by a thousand cuts. Gotta get better on that. Anyway- we’ve done well thus far in’s life but things can be challenging to a degree. Our mortgage is 3600/month and childcare is 1200. Nuts. It’s crazy to make good money and still have to really watch it. Groceries are insanely expensive. I feel for people looking for a home on 70K salary. The market is too inflated and it’s frustrating to watch
One major thing I learned is that it’s not about how much money you make. It’s all about what you spend. Having your finances in order and minimal payments is key
Wow 250k teach me
3600+1200= $5800
Even assuming you spend another $4,200 a month on whatever, you still SHOULD have way more money than the majority of people. You obviously spend too much on unneeded things.
Nicely done! Very easy to understand how important this advice is and how to implement it into our lives.
Thank you Javier!
I guess I'll be renting for another 5 years. That's fine, as long as I am happy. All the money I am saving is in a high yield savings account so it's fun to watch it grow.
Nothing wrong with that!
@JavyVidana You are amazing for replying to your viewers and subbies. Makes us all feel fuzzy inside. Thank you so much for all the great content. Subbie for life! XOXO
@@JavyVidanaThank you - this really helps
We rented the same apartment for 15 years. Don’t let people shame you for living within your means.
@@leahv5892no doubt. Live and let live, as the saying goes.
Where was this video in my early 20s? This is by far the most comprehensive and realistic house affordability guide I've ever seen. You did good work you should be proud of this video.
they probably had books. did you try cracking one open?
@@misterchris8916 A comprehensive video is what he asked for, not a book.
One of your best presentations! Very helpful for all persons looking to purchase a home! Thank You!
In FL right now, if you buy a newer home, you’ll be paying $7k-$9k a year easily in property taxes on a $400k appraised home. Add in another $3k+ for insurance.
Metros like Tampa or Miami have the most insane prices ever. All while having the same wages as Mississippi.
It's very discouraging, indeed!!
But, because these "new" prices are sooooo unstable and certainly NOT sustainable, I feel that it's only a matter of time where things gotta change.
As always, thanks for sharing your wisdom with us!
The economics aren’t there. There is a major housing shortage after 2008 when builders got out of the business and never came back. The country has only gained population and institutional buyers are snatching up investment properties. It’s not going to correct much, if at all.
I would highly suggest thinking hard about this before buying. I make $135k per year and our $420k house is tight to pay and we started with absolutely 0 debt.
Thank you for keeping it REAL. 🙌🏽
Me and my wife just got our first home for 480k. It's possible if you have no debts at all. Thank you Dave Ramsey.
Did you pay $480K in cash?
@@IrisP989 no I got FHA loan. And 15k sellers credit so I just had to put 5k to get into the house.
You have MIP for the life of the loan.
@@rastaman7140 and funny enough if you compare an FHA loan and a conventional for the same 3.5% down payment the FHA comes out being a better loan in the long run.
@fabbz What’s your payment?
Thank you, you are always very honest and informative 👍 😊
Roughly why I have said housing prices can't stay like this. Unless we shift towards almost everyone renting. Which I feel like is what may happen over the next 10 years.
I'm glad we got a condo when we did. But I really just wish we could go back to 2015 pricing.
Housing prices in cities will only go up, that’s never going to stop, but remote work may change some things.
Land doesn’t grow, but our ability to not commute is growing. No reason an accountant in wyoming needs to live in Atlanta to “work” in Atlanta.
That is actually the WEF plan, everyone will rent and no one will actually own anything.
we wish we found something for 400,000 in California, out here the average price is 800,000 !!
Thanks for the video , it does help me understand.. 👍
Thanks for the video, from Surprise AZ.
Hey 👋🏼
I bought my home several years ago for 400k and my monthly mortgage is $2344. I have a renter who pays $1k a month so it offsets part of the mortgage. In another year or so I will be in a financial position where a renter is not needed. It is one way to go about affording a home and I know a ton of other people here in the state of Colorado do the same thing so they can afford the mortgage. My home is now valued at 620k so it was a good buy
Will the renter be able to ever afford a home like yours though now the they are valued around 620K?
This is scary to hear but not surprising for me. I’m so glad your content helped me understand what my family can afford and we bought last year. We aren’t house poor, so I want to thank you for all of the content that you put out there because a large part of that is because of your educational media. Anyways, I often say and wonder how people do it nowadays. I’m extremely fortunate that we aren’t house broke and make decent money as a household cumulatively but I know that what my family makes is above the national or even city average in my area. I genuinely wonder how most people get by and am sad for them. Sometimes when expensive situations come up, I thank my lucky stars that it isn’t the camel that broke our financial backs due to our position but how others do it? I’m not sure. It almost makes me wonder and think that maybe owning your own home or property will not be a common household privilege anymore with all these investors and prices. Everyone was waiting for this big crash but instead what we got was a small decrease in price and double/triple interest rates not to outweigh the price change. It’ll either be very slowly over time or it will never get better. I’m so glad we didn’t wait from the fearmongering that media puts out to buy because truly the best time to buy is when you can afford it, period.
This video is gold a absolute Jem thank you sir !
Thank you for making this video bruh. I am amazed how people are buying 600-700k houses. Even in a small town of Idhao(Idaho Falls) houses are 450k + !! it's just unsustainable!
I’m buying a single family home just over $600k with cash. There are a lot of people out their with money. The prices today will seem dirt cheap in ten years. Once interest rates come back down homes will resume a 3-5% annual increase. It’s actually already happening now even with 7% rates. Most people are paying cash or have a lot down. Incomes are way up, there is a shortage of workers, and a shortage of houses especially single family.
@@user-tb7rn1il3q Nah, your delusional. Sales look "up" because there is so few buying. Buying demand is at an all-time low. The middle class is priced out completely unless they have been saving just to buy a house and not doing anything else for the last 10 years. With rent as high as it is, it is even harder to save. And where are incomes way up? If they were way up, you think there would be a shortage of workers?
@@GrapplingDork There are still bidding wars going on. There is a shortage of workers because people have a lot of money and don’t need to work. The boomer generation is loaded and retiring. The housing shortage keeps getting worse. Many multigenerational families with lower incomes are pooling together to buy a home. The middle class is not priced out when you factor in they have record equity from their previous often completely paid for home.
@@user-tb7rn1il3q Supply is still low, so yes, bidding wars will still go on. Not likely people have lots of money when consumer debt is at an ALL TIME high. Institutions/Investors are the only reason supply is low. They were greedy and they will find out the hard way. The middle class is priced out if they are in their mid 30s or younger because they most likely have never had a good opportunity to buy. If unemployment ever does increase greatly, those multigenerational families won't stay above water if even 1 person loses their job.
@@user-tb7rn1il3q It's insanity to call $600k home cheap. For average middle class homeowner, who is taking out a mortage, any monthly payment of more than $3500 is putting your liberty and sanity at risk. With a $3500 monthly payment, you total monthly expense will be at least $7000(groceries, insurance, car, etc) which means you become a slave to you job or gig.
Really useful info !
Great video!
Remember people, this world is never setup for one person to be alone, it's meant for at least 1man and 1 woman working tirelessly together to meet a goal.
I live in California and putting $25,000 down on a $400,000 house, my payment would have been around $3,000 a month. My rent is $1800. Saving money until I'm ready to buy.
So single people either need to make 6 plus figures or find someone to marry?!
Yes
Or just have rich parents who can pass down one of their investment homes down to you or give you a small loan of $100k for a down payment
@@costak7679 that happens for a lot of people. Everyone else has to work for it
Hopefully we have a spreadsheet to work on you say?!?! Bro, I have YOUR official spreadsheet! And it's very helpful.
Javier. I make 149k a year as a FedEx truck driver. My wife makes about 48k a year, and even we cant afford a new house here in Las Vegas. AND i paid my house off, and the house is worth 311k. But we dont want to sell, so we can rent it out later.
Could you make a video of how to rent your house out and using that income to buy a new house? Thanks! Love your channel btw
For sure!
@@JavyVidana ❤️❤️ thanks Javier. I love watching your videos. We have tons im common (Zelda, Nintendo stuff 🤣) and greatly respect you and your beneficial information. The wife and i learn a lot from your videos
Really? $149k as a FedEx driver? How so? Please elaborate….cause I’d be interested if you really make that much
Yo bro wtf how many hours u work a week????????
I love the takeaway here. If you need a house or just want one that badly, go for it. But if you can afford to wait you may be glad you did.
I'm glad he said 166k since we just bought 400k + house and our house hold income is actually just over what he suggested. But we qualified for a 750k loan. Thanks but no thanks.
Great content! Earloer this year while searching on Zillow, it occured to me while looking at the mortgage calculator that I should be focusing on our Net income instead of Gross... like Zillow does for some odd reason lol. Talk abt having reality slap you in the face. I damn near choked on my coffee.
I live in nearly a $600k home. Everyday I wish I didn’t. If I ever lost my job I’m screwed.
@Joe-no7gs yeah. I love my house but not the cost. As far as an investment goes it’s actually increased $20k since I bought it in April. Still wish I went cheaper.
You are right about buying a house, it’s something that we don’t have to worry about landlord. This is why we decide to buy a house after living 10 years in an apartment. Even though with 7% interest rate, we pay the same as amount as renting an apartment. Just buy a small house. Don’t need to be huge, big, big backyard, just something that fit 4 people. 😃
More people need to watch/learn this
Can you make a video on can you actually afford a mobile home?
Great video
You forgot school tax. In NY I pay $10k for the school and property tax combined. In FL I pay about the same in taxes as NY but utilities are higher in Orlando and then there is the gardener $180 per month, HOA $100 monthly, and the endless tolls about $60 monthly. I’m going to rent soon cause it’s just too costly to buy and maintain a home.
How’s the home insurance payment looking? I’m in Orlando too but I rent. Probably will rent forever if I stay here.
@@macedaking Disney is downsizing so there will be mass layoffs and sell off of housing soon in Central Florida. Orlando and Tampa markets are expected to crash by 60% or more in the next 3 years. Remember these areas crashed 70-80% in certain pockets over a 5 year period in the last big recession.
Fun facts from Canada:
Average home price is $816k (let's round down to $800k for simple math)
Minimum downpayment required (regulated by government) is $25k (net amount accounting for mortgage insurance added to mortgage balance)
Mortgage amount of $775k @ 6.09% rate = $5k/month
Add property taxes and insurance brings $5k/month to $5.25k/month
If $5.25k is intended to be 30% of net income, then the income is $17.5k/month, or $210k/year
Canada has much higher income tax rates than any of the States (even higher than California), so this is a pre-tax income of $370k/year
Average Canadian income is $59k per year
This is AVERAGE
Nice video!!! Be smart enough to know that nobody got rich from salary. Being successful start from mindset. Money invested is far better than money saved , when you invest it gives you the opportunity to increase your financial worth
It's not difficult, but you have to learn and handle it. Another thing is that if you can't manage your home, maybe you shouldn't invest on your own. If so, you should hire a CFP to help you diversify your assets to include ETFs/index funds/mutual funds and stocks of companies with consistent cash flows rather than betting on penny stock
True, a lot of folks downplay the role of advisors until they are burnt by their own emotions. I remember a couple of summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for license advisors and came across someone of due diligence, helped a lot to grow my reserves notwithstanding inflation, from $75k to approx $240k so far
I'm intriguing by your experience. Could you possibly recommend a trustworthy advisor you've consulted with?
Having a counselor is essential for portfolio diversification. My advisor is Mr Morris who is easily searchable and has extensive knowledge of the financial markets
Wow!!! He's my financial Coach I'm trading with him here in Washington DC. Very true! I've been able to scale from $5k to $26k in this red season because he figured out defensive strategies that help portfolios be less vulnerable to market downturns
California is actually a low property tax state but we still pay over $5000 on a home that was acquired for $490,000
Insane my wife and I bought our house is 2020 for 625k 5% down with 3% (ish don’t exactly remember) interest. Our payment with everything is $3500. I wonder how much more that same amount would be today
Best way to afford a payment on that big of a purchase is to be out of debt. No student loans, credit cards or car payments.
terrible advice. i know a lot of rich people and this is a poor persons mentality. properly leveraging manageable debt is the balance to strive for. having zero cash but being debt free is an awful trade off
@@10essee10titans who said anything about having zero cash? lol simply stating that it is easier to handle a mortgage when you don’t have all your money tied up in debt payments
I believe @TheV is saying that having no debt will free up more income to afford the payment. But I could be wrong and I understand what you are saying as well.
@@jomeikaclark1385 can’t help but laugh @10essee. Claiming to know a lot of rich people and implying that they have no wealth 😂. Staying out of debt has help me reach home ownership twice by age 30. I’m only 31 if you must know. Just trying help the next person reach the goal of home ownership. This is just what I have found to help me.
I agree with Vsanchez. I think everyone should get a home mortgage only when they're debt free, that way they have more cash in hand. That's exactly what I'm doing currently, I won't get into a mortgage until I pay off my car first.
I just wanna buy a 1br apartment. I don't want my whole existence to be paying off my mortgage.
No joke, I've seriously considered buying a couple of acres and living in a yurt. With the right one, you can even live in cold climates year round, and you can always move it later if you need to.
@hypergraphic I wouldn't be opposed to that since I work remotely, but it would be a hell of a commute for my wife.
Javier, I love your channel, and appreciate the down-to-earth approach, but some of your comments have me questioning whether I should cry or laugh. $6K for property taxes is **not** "high" in most of the US, regrettably. Here in FL we pay an obscene $12K a year (yes, I said 12 THOUSAND) in property taxes for our house. And it is a regular house, not a McMansion. You pay about 2% of the total price. And houses are usually in the $600K to $1 million range in South FL. And even these crazy figures do not buy you that much house these days. There are 2200 sq/f houses selling for $1.2 million here. So you do the math. I WISH we were paying $6K in taxes! Add the insane insurance premiums to the mix, plus hurricanes, and 115 degree weather on a daily basis, and one can not help but ask "why on earth would anybody want to move to FL today?". There is a reason why we do not have a state tax system. We MORE than make up for this with our property taxes and insurance rates. In fact, I assure you that most home-owners that live in states with state tax spend less money, overall, than anybody who owns a home in FL. This is NOT "paradise". More like hell, and going by all the temperature records we broke this year, I meant that in a literal sense as well.
OMG I am so sorry to hear that lol. That is insane
@@JavyVidana Yes, it is insane. I only wish most folks would mention this "small" detail. It is reality and no exaggeration. Everybody loves to overpraise and overrate Florida, but the truth is that this is one of the most expensive states in the country when you factor in insurance and property taxes. Yet most are clueless because they keep hearing the "no state tax" and "paradise" nonsense. Our neighbors from across the street moved to South FL from Chicago. They were shocked when they received their first property tax bill in November, about 1 year after they closed on the house. It was above $12K and, of course, their realtor never discussed this with them. They never bothered to ask, either, so both parties are at fault. There is no free lunch. If they do not collect it from one source it is going to have to come from another. Even if you were to be mortgage-free, a 100% paid-for house in FL (average nice house, not a McMansion) will cost you easily $2K/month just in taxes, insurance and utilities alone.
400k is rookie numbers for Canda. Aerage house is upwards of 800k.
Parents basement it is…
So glad I bought in 2016 before CRAZY TOWN took over.
Lol I live in NY, my property and school tax are around 8000 dollars a year on a $177k mortgage, total payment with PMI taxes and the loan is around 1600
My county in Texas is 2.14% for property tax and my house is around 400k. my property taxes are like 8900+/year. I think 6000 is quite conservative for a high interest state. That extra 3k adds a lot to the monthly payment. Check the property tax in your area first!
Wow, they really get you, but to be fair I wish I paid no income taxes and twice the property tax. Right now I pay 10k property tax on an 800k house, but I paid more than double that in state income tax.
@@mrb152 That's reasonable in Texas, I'm in the DFW area and I paid $9K last year on a $550K property evaluation, the new 2023 tax assessment the just kicked in affect for May 2023, property taxes is now $13K on a $750K evaluation. I pay a double tax though, standard property tax and the development community tax that's basically standard county property taxes again.
In Cook Cty, IL prop tax the highest, high sales tax and income tax. Crook County
This is good👏🏾👏🏾👏🏾👏🏾👏🏾
To put down 3.5% on FHA mortgage on a $450,000 you need a little more than $15000. Closing costs will be another $4000-5000. Maybe another $8000-10000 in initial repairs. Just a decade ago, $8000 could get you into a decent home. Greed will crush the market again and when values go down 60-80% in some areas, I won't feel sorry for people who bought while overpaying at the peak, shifting the peak even higher.
Yeah unfortunately housing supply is so limited. This isn't like 2008. Likely a slow decline in prices only because of rate hikes, before another spike once fed starts lowering rates.
@@JonathanRootDthe economy under slow brain Biden it is worse than 2008 and we only started
@@cultleader3572did you pray to your maga daddy yet today?
Prices aren't going to be going down ever dude.. To think that is just delusional.
You people wanted diversity and open borders.. Reap what you sow
@cultleader3572 Biden authorized all that money printing? Coulda swore it happened in 2020 hmmm. Yup you're definitely a cultist lol
If ur grossing 7k a month, u can't really afford the hypotherical budget u have in your example, since the total monthly expense is 5473 but the 7k after tax would be around 5250 if assuming taking home 75%. Even if assuming taking home 80% it wouldn't really be feasible without serious cuts to the needs category.
Great and incredibly helpful video. These numbers are right around what my wife and I bring home and there is a new development nearby that has houses in the "high 300k's." Thank you Javier!
Javier
I live in Central Texas and looking at a house and found that the property tax’s are 3% in that city I am looking in So on a 400k house the tax’s are $12k a year in tax’s.
Making 100k ain’t enough in this world now. Especially buying in this environment. Pretty sure there’s a correction on the Horizon. Especially since this is the Fall/Winter house season.
There is no price correction! People have ben talking about & waiting for a price correction for years & the onky thing that has happened is prices & interest rates have gone through the roof.
No correction coming. House prices will go up 50% over the next 12 months.
@@alexlaw1892 50% up in 1 year time lol lots of people are gonna be rich in equity.
Sofi mortgage rates are 5% with good credit. We will be back to 4% within a year. Hopefully with more inventory to get prices down another 20% nationally.
We are moving for my wife's work.
Just graduated with her M.S. RN.
Looked for a house to buy in this tourist area where she grew up.
Been following the market for a few years.
Right now supply is limited and buyers are desperate. Doesn't help that Airbnb's bring in over $50k a season so there aren't any long term rentals.
Ended up lucking out. Rented a house from a friend of a friend who was moving for the military.
Now we are going to keep saving to buy land and build ourselves a house.
I can build a house for 200-250k that is worth 400-500k in a normal market 750k in this market.
Then I'm going to build some small cabins for short term rentals.
That sounds like a terrible idea, you will be renting for decades.
We’re lucky we bought our home in 2021 with a 2.3 percent interest rate. House was 209k we pay 1,140 a month. And we net around 100k together. Ima hold this house til it’s worth 400k if I Ever Think of selling. It’s currently worth 280k
Gotta make 150k a year to net enough to buy a 400k house. Absolutely ridiculous
Wife and I clocked in 135k last year and qualified for 500 we tried looking around 400 for 6% interest only thing was we in Cali 😔😔 unless you wanna commute 2-4 hours everyday it’s basically game at this point unless we double or even tripple our household income
Your exactly right, we had to move 80 miles out of Los Angeles to purchase a 500k home back in 2017. I’ve been commuting since then and your right about the travel time. It sucks, but it’s worth it. Last time I checked the 2 bedroom we used to have back them is now more than our current mortgage $2500. How are people ever supposed to save up for a down payment with these rental prices?
My husband and I are in the process of building a new home for $655,000, on the west coast and pricing in the pnw is crazy high along with the high interest rates.Hoping the interest rates eventually goes down, in the long run because 6% and up is crazy.
This is why I think, even though reports are that mortgages are going to very un-risky people compared to 2008, the fed has been open they are hoping job loss can reverse some inflation… if people lose their jobs with mortgages this expensive, rapid contraction.
Do a video on surviving the first few years being house poor. What are the pros what are the cons? Thanks great info new subscriber.
Surviving past the first few years? The payments do not decrease over time (the amount of interest owned over time does), your minimum will remain your minimum. You can either try to pay it off early or make more money or (hopefully) refinance down to a lower rate if available in the future.
@@HSQadri with a lesser amount refinanced won’t that lower the monthly payment?
😂okay, high property tax is 6000???? I didn’t know, I live in florida, 400k house WILL run you to 9k per year!
If you have it in your state you guys should look into NACA. They have 0 down, 0 PMI, basically 0 closing cost and you can buy down the interest rate to almost zero
I just lost 4 times to full cash offers. Got second place for 3 of the homes. Was planning to pay 35k over asking... 815 avg credit, ~1/2 downpayment, 475-500k house.
Got a my dream home 20k over btw
I bought in late 2015 ,texas has homestead tax program when u first buy. I think it saved alot of folks plus i think governor passed something recentyl to not invrease our taxes too much cuz of cost of living. Lets just say my payment is low af
I like how you broke it all down. First time home buyers should watch this video to get a reality check. I'm extremely happy that I purchased my Los Angeles home in 2011 for $285K and later on refinanced @ 2.85%. My monthly mortgage payments (including property tax) are only $1,665/mo!
In Connecticut $5000 is the avenge property tax on a $225,000 house 😂😂😂😂
Here’s food for thought: Illinoians think $6k is cheap for property taxes. Average in my area outside of Chicago is $9k-$10k. Some suburbs of Chicago are $13k and up for a $400k house. It’s absolutely horrendous how broke our state is. We also pay income taxes as well. I wish we could move but my job won’t let me move out of state. 😭
Usually excellent schools though. Some of the best public school districts in the nation are in Chicagoland. Except the city, which is harder to justify but I like living here. I don’t need a car so that’s savings right there.
@@euenfheiejrjNot everyone has kids lol, that may or may not be important to them. IMO thats just more or less just an excuse to get robbed by the government
I live in Massachusetts. I would love to see a $400,000 home.
The numbers are right, also have to include the pitfall if your taxes go up because property value goes up so the escrow can easily jump 400 -500 a month
Bought my first house in 2019 for 250k. Everyone thought I was crazy as I had just graduated college and only made 60k. “Wait for the market to drop” they said. Spent my entire meager 15k life savings down for a 3.5% down payment + closing costs. All my friends who though I was stupid then now sit around and complain that they will never afford a house…
I would be ecstatic for a 1.69 tax rate living in Texas. Some of the new neighborhoods have a 3.41 percent tax rate. Which would be 13,600 per year on a 400k house.
I said the same thing as someone who lives in Frisco.
@@jacklub6343 looking around the woodlands here. It’s brutal. 400k is low for a new home around here anyway.
Texas property taxes are absolutely wild
The other deeper layer you should touch on as well next time, is getting stuck in the two-income trap when getting into a house
$6,000 property taxes on a $438K house? Try $9,000 in Texas and that was with Homestead exemption
the conclusion needs go be heard by the masses
I have the house and can confirm, it’s not affordable on a $100k income
So to live comfortably at current interest rates your average house price to income ratio needs to be about 3:1, house price divide by gross income. Given that most are now 6-8:1, everyone is having to buy at prices far above what their income is comfortable with.